Ranger Athletic Equipment Uses the Accrual Method and Reports on a Calendar

question 117

Essay

Ranger Athletic Equipment uses the accrual method and reports on a calendar year. Ranger provides two-year warranties on all sales of equipment. This year, Ranger estimated warranty expense for book purposes, and he accrued $1 million of warranty expenses. However, during the year Ranger only spent $400,000 repairing equipment under the warranty. What can Ranger deduct for warranty expense on the tax return for this year?

Understand the correlation between temperature changes and carbon dioxide concentration levels over historical periods.

Comprehend the impact of human activities and natural factors on global warming and climate change.

Identify the major greenhouse gases and their concentrations in the atmosphere.

Describe the efforts and treaties put in place to mitigate global warming effects, including specific protocols.

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Definitions:

Cash Flow Timeline

A visual representation that shows the schedule of inflows and outflows of cash within a business over a specific period.

Shortage Costs

Expenses incurred from the unavailability of inventory or resources, leading to missed sales or production delays.

Carrying Costs

The expenses incurred by holding inventory, including storage, insurance, and taxes.

Current Assets

Assets owned by a company that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business, whichever is longer.